By now everyone knows that the biggest portion of US household debt, besides mortgage debt, is a towering $1+ trillion in student loans, more than total outstanding credit cards or car loans, which is problematic for three main reasons: it is increasing at an unprecedented pace due to lax Federal lending standards, delinquent loans are soaring and are now well over $100 billion and rising at a pace of tens of billions each quarter, and it can not be discharged. At least that is conventional wisdom. But while points 1 and 2 are indisputable (and deteriorating), it is point 3 that is the more troubling for an entire generation of young men and women who are afraid to splurge on levered purchases such as houses due to an already insurmountable debt overhang, and a job market that is hardly hospitable to young entrants. Luckily, there may now be solution stamped in US case law.
Meet Mike Hedlund.
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Stop giving out student loans, and make the deters pay up. How hard is that?
ReplyDeleteIf you sign on the dotted line, you're in a contract. Don't like the cost? Return the diploma and never be able to mention it in any resume/interview. It should be like a car loan, don't pay it, and the repo man gets the stuff you didn't pay for.
ReplyDeleteIf discharging ever did begin,people who have had college loans payed off for years would want reimbursement.For many reasons,including future college loans discharging should never be considered.
ReplyDeleteAnother government failure. By the government getting involved with these loans (Salliemae) the standards of US colleges and universities were lowered due to the old "everyone's entitled to a degree" mentality.
ReplyDeleteIt's a shame because the reality is most degrees anymore don't mean a thing-an average student can get one and not even crack a book and they hand them out a dime a dozen.
So far the first two people who commented are idiots. I understand that the student loan is over a trillion but very few this days can pay for all of their college expenses so if the student loan is dissolved then their will be less and less specially educated people that has to ability to fill in the require jobs, and yes their are jobs but many are dual degree, requires masters or doctoral. Also with the poor economy their are very few opens as people tend to go in one direction which fill up many jobs in a section while not in others. for example their are many lawyers but very few can find jobs since women aren't getting married, less drivers in areas because of high gas prices, and companies bribing or manipulating the law as they please.
ReplyDelete701-Boohoo. Quit crying and pay for what you used. I never said dissolve the student loan system, I just think it's absolutely moronic to rely on the gov't to decide on those loans. The dept of Education is a joke, who annually lose 10%+ of their operating budget to fraud and mismanagement(that according to Congressional testimony). Hell, in 2003, the GAO created a fake university in London, and created 3 fake students, and then applied for and recieved over 50K in student loan $$. Subsidizing loans doesn't make sense when the lender isn't of sound mind.
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